Over 30,000 investors are sitting with worthless Flyr shares. But for facilitators and advisers, the airline’s repeated hunt for money became a fee fest.
It’s not hard to find people who have lost money on Flyr, but who made money on the bankrupt airline?
Two groups stand out, at the stock market listing, repeated fundraising and finally the bankruptcy: brokers and lawyers.
The brokerage houses Sparebank 1 Markets, Arctic Securities and Carnegie were commissioned several times to be financial advisers and facilitators.
The law firms Wiersholm and CLP have assisted the company and the organizers legally.
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Flying from challenger to bankruptcy: – Life was not planned
A review of the minutes of the general meeting shows that Flyr’s total estimated expenses in connection with the stock market listing and three capital raisings are around NOK 80 million.
The investors injected a total of NOK 1.4 billion through the rounds of capital raising.
This means that the advisers collected almost 6 per cent of the total money the shareholders put into Flyr.
– Earnings are high
E24 has presented the calculations for all the brokers and law firms mentioned, but has not received any comments on the matter.
“As lawyers, we are subject to a duty of confidentiality and I cannot comment on the things you ask about”, writes Lars Gunnar Aas, head of the law firm CLP in an email to E24.
Finance professor Øyvind Norli at BI explains in general that all investment banks make money by helping companies raise capital.
– Earnings for investment banks are high. But it is not obvious that it is too high. The cost to the company of making a mistake when raising capital is so great that it may make sense to pay well to reduce the probability of making a mistake, says Norli.
Norli says that there is a lot of research in the area, especially in connection with IPOs.
– It is doubtful that companies will be able to raise capital on their own, where bank loans are not applicable, says Norli.
The bankruptcy came as a result of the company and the organizers failing to raise money, after another failed capital raising in November.
The IPO stands out as the most lucrative transaction. The work of marketing the company to investors, preparing a prospectus, and other things meant that the advisers collected an estimated NOK 45 million when Flyr went public.
The customers lined up
E24 has access to documents that show which of the brokerage houses’ customers lined up when the organizers hunted for money to fill the Flyr coffers.
Several funds stand out, including Nordea Asset Management and First Fondene. These topped the subscription lists at the stock exchange listing and a capital raising, respectively.
A number of high-profile investors were early on on the ownership side, including Øystein Stray Spetalens Tycoon Industrier, Arne Fredlys Apollo and Jan Haudemann-Andersens Datum. The traders got out quickly.
Several funds and profiled investors participated in several rounds of capital raising, but in the end the list of shareholders was dominated by small shareholders.
Over 30,000 investors sat with the share when Flyr went bankrupt. The majority were customers of Nordnet, while several thousand were customers of DNB.
Course fees at the top
Between the IPO and the capital raising, several brokerage houses have made money from trading in Flyr shares.
Flyr has been a popular share among small savers, the specialty of brokerage Nordnet.
Nordnet had an estimated NOK two million in commission income from trading in the Flyr share last year, says Anders Skar, Norway’s head of Nordnet. How much Nordnet received from brokerage income the previous year is unknown. Flyr went public in March 2021.
Two teams from the law firm Kvale and the audit firm BHL are now working with the bankruptcy estate of Flyr and will present a report to the court at the probate meeting next Thursday.
It is unknown what the bill will be for the work the lawyers and auditors do with the bankrupt estate, but one thing is certain: They are first in the queue, before employees and all other creditors, when the estate’s residual values are to be distributed.
